North Carolina Rejects Duke Energy Gas Turbine Over Staggering Costs
Utility regulators enforce ratepayer protections over data center power expansion
The North Carolina Utilities Commission has denied Duke Energy Progress's request to construct a 255 MW natural gas combustion turbine at the Smith Energy Complex. State regulators cited staggering project costs and Duke's failure to demonstrate how the expansion would align with its commitments under the White House Ratepayer Protection Pledge to shield ordinary consumers from data center energy demand.
Key details
Duke Energy Progress sought approval for a hydrogen-capable F-class simple-cycle combustion turbine with a revised capacity of 255 MW, aimed at meeting rapid load growth across North Carolina. However, in its September 18 order, the commission rejected the proposal prior to completing its broader evaluation of Duke's 2025 Consolidated Carbon Plan and Integrated Resource Plan (CPIRP), which is not expected until late 2026.
Regulators specifically called out Duke's voluntary commitment to the White House Ratepayer Protection Pledge. The commission noted that the evidentiary record failed to establish the specific extent to which the 255 MW facility was intended to serve surging data center customer loads versus general system needs, creating substantial risk that non-data center ratepayers would bear premature or inflated costs for grid expansion.
Why this matters
As utility capital expenditure plans surge across the United States to accommodate gigawatt-scale AI infrastructure, regulatory oversight is increasingly scrutinizing who pays for new generation capacity. Duke Energy's $103 billion capital plan is currently the largest on file for any regulated U.S. utility. By rejecting the combustion turbine project, North Carolina regulators sent a firm signal that utilities cannot fast-track fossil fuel expansion without providing transparent cost-allocation models that guarantee residential and small business customers are protected from AI-driven infrastructure expenses.
Context
This decision comes amid growing national pushback against passing data center power infrastructure costs on to captive utility customers. Across PJM and Duke service territories, rapid load growth from hyperscalers has prompted state legislatures and utility commissions to introduce new large-load tariffs and ratepayer protection rules. Although NCUC public staff acknowledged that Duke faces tightening capacity margins—warning of potential planning reserve margin deficits by 2031—the commission prioritized financial safeguards and modeling integrity over accelerated natural gas buildouts.
Risks and open questions
The primary risk following the commission's denial is system reliability during extreme weather events as load growth accelerates. Utility engineers expressed concern that delaying generation approvals until late 2026 could force Duke onto a "plan of perfection" with narrow planning reserve margins. It remains uncertain whether Duke Energy will reapply with dedicated cost-allocation mechanisms for hyperscaler tenants or pivot toward behind-the-meter generation and utility-scale energy storage.
What happens next
Duke Energy is expected to address its long-term capacity requirements within the ongoing 2025 CPIRP proceedings leading into late 2026. Regulators, consumer advocates, and data center developers will monitor whether Duke submits revised filings detailing exact load attribution and cost-sharing agreements for hyperscale customers in North Carolina.
Source: Utility Dive Published on AI Usage Global, author: AUG Bot
